The invention relates generally to methods of securing disability insurance benefits and, more specifically, to novel methods, generally configured with computer and software technology, of securing Social Security disability insurance benefits and providing ancillary services, such as medical services or products, during the pendency of the claim for Social Security disability benefits and receiving payment for the ancillary services and products from an account, after the deposit of the retroactive Social Security disability insurance payment or future payments.
The inventor's core business consists of representing individual claimants before the Social Security Administration (SSA) for purposes of obtaining Social Security disability insurance benefits (SSDI). Traditionally, the inventor's primary customers (clients) are insurance carriers that write long-term disability (LTD) policies and self-insured employers who desire to reduce their long-term disability expense by obtaining SSDI for their policyholders or their individual employees. The inventor represents uninsured claimants, as well, in obtaining Social Security benefits.
In connection with the provision of services to his clients, the inventor has developed new business methods to provide such services utilizing sophisticated computer programs, databases and electronic fund retrieval methods.
On average, it takes SSA twelve to eighteen months to process a claim for SSDI. Once SSDI is awarded, generally there is a retroactive benefit representing disability payments that should have been paid by the SSA beginning with the sixth full month an individual is off work due to disability. LTD plans are designed to offset the LTD benefit upon the disabled individual's receipt of SSDI. In other words, once SSDI is obtained for a claimant, the LTD is reduced. However, full LTD benefits are paid until the SSDI is awarded. Generally, the disabled employee signs an agreement to repay any overpayment created by the award of retroactive SSDI. A portion of the retroactive SSDI, therefore, is due to the LTD plan as repayment of this overpayment.
For example, a disabled individual is receiving $1,400 per month in LTD. After 18 months, SSA awards disability benefits of $1,000 per month. SSA issues a retroactive check for 12 months of benefits (SSA does not pay during the 5-month waiting period) or $12,000. Based on the plan design the disabled employee's LTD benefit will be reduced by $900 per month, for a net LTD benefit of $500. Since the disabled individual was paid $1,400, he or she would owe the plan $900×12 months, or $10,800.
Additionally, the disabled individual receives a number of financial advantages upon receipt of SSDI:
Increased Monthly Income
Although the initial SSDI may be offset by other disability or retirement benefits the disabled individual already is receiving, the SSDI cost-of-living increases may not. Thus, the combined benefits may increase each year when SSDI cost-of-living increases are paid.
Increased Retirement and Survivors' Benefits
Social Security disability entitlement “freezes” the Social Security earnings record. Social Security regulations stipulate that any years “wholly or partially within a period of disability” will be excluded from the computation of future benefits. Thus, the amount of eventual Social Security retirement benefits, dependents' benefits, or even a subsequent disability or survivors' benefits, may be higher because these lost years of earnings will not be considered in future computations.
Medicare Coverage
After the individual has received SSDI for twenty-four months, regardless of age, he or she also becomes eligible for Medicare benefits. This includes Part A hospital benefits and Part B medical benefits.
Surviving on lower income with mortgages, car payments and other debts is frightening to disabled individuals. When they receive a large check for retroactive benefits, it is difficult to resist the temptation or necessity to use the money to improve their situation. LTD plans were experiencing difficulty collecting this overpayment. The plans were using a variety of collection scenarios:                1. Hope for a lump sum payment by the disabled individual;        2. Recover the overpayment from future benefits ($10,800÷$500=21.6 months); or        3. Refer the individual to a collection agency.        
Scenario 1 generally yields a collection rate of 45% to 65% depending on the dollar value of the overpayment. Overpayments of under $10,000 were paid more readily than amounts over $10,000. Scenario 2 only worked if the individual remained on claim long enough to collect the total amount owed. Too often the individual went off claim due to age or death. Additionally, the LTD plan fiduciary lost the time value of money. Worst case is scenario 3, which yields only $0.50 to $0.60 on the dollar. Scenarios 2 and 3 did not promote a positive relationship with the disabled individual. Hence, the inventor recognized the need for assistance in, and a method for, the enhanced recovery of the overpayment.
Also, in the course of representing uninsured disabled individuals, the inventor recognized that a disabling event affects the disabled individual's life both physically and mentally and leaves him or her with the sense that his or her life is out of control. Although the individual may be entitled to SSDI, on average it takes twelve to eighteen months to process a SSDI claim. The likelihood of an uninsured, disabled individual being able to obtain credit or funds from other third-party sources is questionable. Without a sufficient alternative means of support, the individual is presented with immediate financial concerns. For example, the disabled individual may not have sufficient funds on hand to purchase necessities. Moreover, the disabled individual may need additional or ancillary services such as medical services or medical products as a result of the disabling event and, absent healthcare or disability insurance, have no means to procure the services or products.
The inventor has recognized the need to alleviate the financial concerns and physical needs of the disabled individual to the extent reasonably possible and to provide a means by which such individual may continue to meet his or her basic needs.
Based upon the foregoing, therefore, it would be advantageous to provide a method of obtaining SSDI, recovering any overpayments of LTD benefits and providing financial assistance and medical services or medical products for disabled individuals during the pendency of their claims.